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Avian paint company plans IPO this year
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A trading floor of the Indonesia Stock Exchange (IDX). (JP/Wienda Parwitasari)
T
he Indonesia Stock Exchange (IDX) will soon add a new company to its list, with paint producer PT Avia Avian planning to hold an initial public offering (IPO) sometime this year.
According to Bloomberg, Avian is seeking an IPO value of US$250 million, about Rp 3 trillion, from its planned end-of-year IPO. The paint producer will reportedly use its IPO earnings to carry out a number of expansion plans to help maintain its domestic market penetration rate.
However, Avian has yet to confirm when exactly the IPO will take place.
Binaartha Parama Securities analyst Reza Priyambada assessed that the fate of the paint industry was quite dependent on demand from the property sector, like other construction materials such as ceramics.
(Read also: Outlook bright for IDX in 2017)
Reza however noted that Avian was one of Indonesia’s largest paint brands, being the second-largest domestic paint producer in Indonesia after PT Propan Raya Industrial Coating Chemicals. The market value of the paint industry itself was US$2 billion in 2015.
“If they’re in the top five already, their name is already known. Property developers will always choose the ones that are the most efficient,” he said as quoted by kontan.co.id.
Demand is also dependent on public purchasing power, which is in turn dependent on interest rates, he added.
Avian’s current business rivals are Akzo Nobel NV, which sells the Dulux brand and also Nippon Paint Holdings Co that sells the Vinilex brand. (bbn)
